Richard “Dick” Fuld, the former CEO of the now-defunct Lehman Brothers investment bank, finally broke his silence on the issue after seven years. In a long, rambling speech at the Marcum MicroCap Conference in New York, he spoke about the financial collapse, but avoided taking any responsibility at all for it, despite being in charge of the bank that served as the catalyst for the whole thing.
Fuld, according to The New York Times, believes that Lehman Brothers could have survived if the Federal Reserve had allowed it to. He also blames lawmakers, and a lack of regulation, for Lehman Brothers’ failure, and for the ensuing crisis that saw some Wall Street heavies fall, and others get bailed out with taxpayer dollars.
The Times says that Fuld also places blame on the government’s push for homeownership, along with the rise of hedge funds, sovereign wealth firms and private equity firms, all of which existed in a very hot market. In other words, he might as well be saying, “My bank and I acted the way we did because there was nobody there to stop us.”
Or, put another way, nobody told him right from wrong, so he just went ahead and did whatever made the most money the quickest, and damn the consequences.
Fuld also said that, when the Fed raised interest rates in 2007, that put an end to the housing boom, which subsequently hurt the housing market because of increased mortgage rates and foreclosures. At that point, companies began shedding jobs and cutting costs, and writing down and selling assets. Fuld said that created a self-fulfilling economic loop.
So, instead of being responsible with lending, the banks gave mortgages to whomever, because the government encouraged it with low-interest rates. This, of course, refers to real estate, and the mortgage-backed securities Wall Street was dealing in with such abandon. Those became toxic assets when the housing bubble went bust and people began defaulting on their mortgages at a ridiculous rate.
Who knew that, when you wreck an entire economy with your greed and your reckless behavior, you can just blame the government for not regulating you better, and for doing the things it does? If there ever was evidence that big business cannot self-regulate, this is it. The big banks weren’t recklessly lending money because the government told them to. They did it because they could make lots of money.
Fuld also complained that the rich are getting richer and the “belly of America,” a.k.a the middle class, is getting screwed. However, he said, according to The Times, “Capitalism only works if it starts at the top and filters down.” If he’s referring to trickle-down economics, it hasn’t worked, it doesn’t work, and it will never work. If he’s not, then he’s being an incredible hypocrite, because he’s among the few that wouldn’t let capitalism filter down.
He says we need a change of leadership, to help contain global threats like China, Russia and ISIL, which are “fraying the fabric of our system.” What system is that? The one that he and his bank helped derail, or the one that we need, but don’t have, because Wall Street and others in the uber-rich caste keep fighting against it tooth and nail?
Nothing gets done when people who are responsible for calamities blame everyone but themselves for the problems. Whining, “I did whatever I wanted because nobody told me I couldn’t,” is a sad, sick testament to what Wall Street has become, and what many of the wealthiest among us think.